US Inflation Rises as Trump’s Tariffs Drive Up Consumer Prices

US Inflation Rises as Trump’s Tariffs Drive Up Consumer Prices
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US inflation accelerated in June as President Donald Trump’s tariffs began affecting consumer prices, the Labor Department reported. Annual consumer price growth reached 2.7%, up from 2.4% in May, marking the fastest pace since February. Rising energy and housing costs were key factors, but tariffs are also starting to impact everyday goods.

Prices for coffee increased by 2.2% from May to June, citrus fruits by 2.3%, toys by 1.8%, and household appliances by 1.9%. Clothing prices rose 0.4% — the first uptick for the sector in months. However, declines in airfare, hotel stays, and car prices helped balance the overall rise.

Economists, including Fitch Ratings’ Olu Sonola, noted early signs of tariff-driven inflation, especially for household items, which could intensify in the coming months. The effective US tariff rate has jumped this year due to Trump’s 10% levy on most imports and additional taxes on goods like cars and steel.

While some tariff plans were paused, new threats loom. Despite Trump’s calls for lower interest rates, the Federal Reserve has held steady, saying it needs more time to gauge the tariffs’ impact. Analysts see no imminent rate cuts but remain cautious about the outlook.